Cannes again plays host to the world’s property sector as top industry representatives attend the MIPIM property conference. Usually marked for its display of impressive models of planned developments and the buzz of deal-making, this year’s event is somewhat subdued as many delegates ponder the most significant slump in the market in over ten years.
MIPIM 2024 Reflects Mixed Feelings on CRE Recovery
Reportedly, concerns at the forefront include the plunging commercial real estate market (CRE). During the pandemic, many offices were vacated by staff, and businesses established remote work practices. Since then, the market never fully recovered.
Based on Reuters information, the 20,000 attendees include property giants such as LaSalle, Greystar, AEW, Patrizia and Federated Hermes (FHI.N). Some representatives were cautiously optimistic and said there are tentative indications of CRE recovery.
Others, such as the head of Europe at LaSalle Investment Management, Philip La Pierre, could have been more positive. He reportedly said:
There’s a lot of hot air being pushed through the Croisette. So you’ve got to navigate that quite carefully.
Rising borrowing costs and post-pandemic open offices cast a shadow on property investments. Reuters reported that year-on-year European commercial capital values dropped by 13.9% in the last quarter of 2023. La Pierre opined that about 30% of European office space is a waste.
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The US commercial property sector mirrored the European situation. An 11 March 2024 MSCI report indicated that deteriorating office prices placed a yoke on the performance of the entire property market. This report did, however, note the uptick in the European hotel market.
